How to Navigate First-Time Home Buyer Mortgages in BC (2025 Edition)

Buying your first home is exciting — but it’s also one of the most complex financial steps you’ll take. In British Columbia, where property values are high and lending rules are strict, first-time buyers face unique challenges when trying to enter the market.

first-time home buyer mortgages

Whether you’re hoping to buy in Surrey, Abbotsford, Langley, or nearby Fraser Valley areas, this guide will help you better understand how first-time home buyer mortgages work in 2025 — and what you can do to prepare for a smooth approval and successful purchase.

What Defines a First-Time Home Buyer?

In Canada, you’re considered a first-time buyer if:

  • You’ve never owned a home, or
  • You haven’t owned a home in the past 4 years, or
  • You’ve gone through a marital or common-law breakdown and no longer live in a previously owned property

Meeting this definition can open the door to several federal and provincial assistance programs.

What’s Required to Qualify for a Mortgage in BC?

To get approved for a mortgage as a first-time buyer, lenders will look at:

  • Your credit score (ideally above 680)
  • Your employment and income stability
  • Your debt-to-income ratios
  • The amount you’ve saved for a down payment

If your down payment is less than 20%, your mortgage will require CMHC insurance, which protects the lender but is paid by you through an insurance premium added to your loan.

Down Payment Rules in 2025

In most parts of BC, you’ll need to budget for:

  • 5% on the first $500,000 of home value
  • 10% on the amount between $500,000 and $999,999
  • A full 20% if the home costs $1 million or more

For example, a $750,000 townhouse in East Abbotsford would require a minimum down payment of $50,000. However, many buyers aim for more to reduce their monthly payments and avoid higher CMHC premiums.

Mortgage Incentives for First-Time Buyers in BC

Here are some programs helping first-time home buyers in 2025:

1. GST Exemption on New Homes

The federal government is expected to implement a GST exemption for newly built homes under $1 million, saving buyers up to $50,000 in upfront costs.

2. RRSP Home Buyers' Plan (HBP)

Withdraw up to $35,000 from your RRSP tax-free ($70,000 for couples) to use as a down payment.

3. First-Time Home Buyer Tax Credit

This non-refundable credit can provide up to $1,500 in income tax relief after your purchase.

4. BC Property Transfer Tax Exemption

If you’re buying for $500,000 or less, you may be fully exempt from property transfer tax. Partial exemptions apply up to $525,000.

Fixed vs. Variable Rates: What Should First-Time Buyers Choose?

In 2025, fixed rates are trending lower, but are still higher than they were in the early 2020s. Many first-time buyers opt for fixed-rate mortgages for stability — especially in volatile markets. However, variable rates can still offer savings if the Bank of Canada holds or cuts rates further this year.

Discussing both options with a broker can help you align your mortgage choice with your risk tolerance and financial goals.

Common First-Time Buyer Mistakes to Avoid

  1. Skipping Pre-Approval
    Pre-approval not only helps you lock in a rate — it shows sellers you’re serious.
  2. Stretching the Budget
    Don’t max out your limit. Focus on affordability, not just approval.
  3. Ignoring Total Costs
    Be ready for legal fees, appraisals, insurance, inspections, and moving expenses.
  4. Only Comparing Rate, Not Terms
    The lowest rate might come with steep penalties or limited prepayment options.

Final Thoughts: Prepare Now, Purchase with Confidence

Getting a mortgage as a first-time buyer can feel overwhelming, but the process becomes much easier with the right guidance. From choosing the right product to accessing incentives and planning for closing costs, each step can be handled more smoothly when you start early and work with a knowledgeable advisor.

About the Contributor:
Satbir Bhullar Mortgages helps first-time buyers across BC — including Surrey, Abbotsford, and Langley — secure tailored mortgage solutions with expert advice and access to top lenders.

Comments

Post a Comment

Popular posts from this blog

How to Find a Mortgage Broker in Abbotsford

Looking for the best mortgage broker in Abbotsford ? Need to hire the services of a mortgage broker? The right broker can help you get through the mortgage process faster and with fewer difficulties. When looking for a mortgage, you have the option of working directly with a lender or through a mortgage broker. A broker can assist you in comparing home loans from several lenders and selecting the best option for you, along with walking you through the entire mortgage process. Right from the application to closing, assisting with paperwork and possibly speeding it up, a broker will stand by your side every step of the way. Make sure to ask questions and assess whether the mortgage broker is eager to go over your options and solve any issues you may have. Here’s a step-by-step guide to help you find the right mortgage broker: Start Your Search Early It is recommended that you choose a mortgage broker at the start of the home-buying process because available loans and pricing differ among...
Read more

Is Refinancing Your Mortgage Right for You? A Guide for Homeowners

Owning a home is a significant financial commitment, and your mortgage is often the biggest monthly expense associated with it. But what if there was a way to potentially lower your monthly payments, improve your interest rate, or consolidate debt all while keeping your home? This is where refinancing mortgage comes in. But with so many options and factors to consider, it's natural to wonder: Is refinancing the right choice for me? This blog dives deep into the world of mortgage refinancing, helping you understand if it might be a good fit for your financial situation. We'll explore the benefits, potential drawbacks, and different scenarios where refinancing could be advantageous. What is Mortgage Refinancing? Think of refinancing as re-doing your existing mortgage loan. You essentially replace your current loan with a new one, often with different terms and conditions. This could involve: • Lowering your interest rate : This can significantly reduce your monthly payments, f...
Read more

How Lower Mortgage Rates Impact Real Estate?

Image
On January 29, the central bank announced that it would lower its lending rate to 3%, a 25 basis point decrease. In December, the BoC reduced its lending rate for both residential and commercial mortgages by 50 basis points. The interest rate on a variety of financial products, including bank accounts, mortgages, loans, and more, is influenced by the BoC's interest rate choices. Rate reductions therefore affect many aspects of your financial life, including the value of your house and the returns on your investment portfolio. Here are some financial effects of the interest rate drop: 1. You might be eligible for credit with a reduced interest rate Banks typically reduce the interest rates on their loans, credit lines, and mortgages when the prime rate declines. Your monthly payments will probably go down if your debt has a variable rate, like a variable-rate mortgage, variable-rate loan, or line of credit, because you'll be paying less interest each month. Any new fixed rate lo...
Read more